China's manufacturing activity improved slightly in March from the previous month, the government said Tuesday, but analysts said the world's second biggest economy remained weak.
The official purchasing managers index (PMI) was 50.3 in March helped by an improvement in export orders, the National Bureau of Statistics said, up from an eight-month low of 50.2 in February.
The index tracks manufacturing activity in China's factories and workshops and is a closely watched indicator of the health of the economy. A reading above 50 indicates expansion.
"Though manufacturing activity remains subdued, it has held up better than many had feared," said Julian Evans-Pritchard of Capital Economics.
"Today's reading still points to weakness in the sector," he added.
The market had expected PMI to remain unchanged in March at 50.2, according to a poll of economists by Dow Jones Newswires.
British bank HSBC also said Tuesday that its measure of China's PMI -- which gives greater weight to smaller companies -- was 48.0 in March, the lowest since July 2013. The March figure was revised down slightly from a preliminary estimate of 48.1.
"The Chinese manufacturing sector continues to lose further steam," said HSBC China economist Sun Junwei.
"Despite improving new export orders, domestic weakness implies 1Q GDP (first quarter gross domestic product) growth is likely to have slipped below the annual growth target of 7.5 percent."
- Moderate growth -
Last month, Chinese Premier Li Keqiang set the nation's annual growth target at "around" 7.5 percent, the same level as the goal for last year.
China's economy actually grew an annual 7.7 percent in 2013, the same as in 2012 -- which was the slowest since 1999.
Analysts expect the government to take steps to boost the economy, though most have ruled out a huge stimulus package, instead expecting moves such as a cut in the amount of funds banks must place in reserve with the central bank and targeted government spending.
"We don't expect a big stimulus package, but we expect the government to introduce some fiscal measures to stabilise growth," said Lu Ting, an economist at Bank of America-Merrill Lynch.
The official Xinhua news agency on Monday also played down hopes for radical government moves, saying massive economic stimulus was unlikely.
"With further shrinkage in China's growth on the cards in Q1 (the first quarter), reform will be used to fend off economic slowdown rather than an economic stimulus," it said in an analysis.
China is due to release first quarter GDP figures on April 16.
The Asian Development Bank on Tuesday forecast China's growth to be more moderate in the years ahead, given slowing investment growth and the government's implementation of structural reforms.
The multilateral lender forecast China's GDP growth at 7.5 percent this year and 7.4 percent in 2015.
"The reform agenda... has the potential to improve the quality of growth, make growth more inclusive, and ensure it is sustainable over the long term," ADB's deputy chief economist Zhuang Juzhong said in a statement.
"But as the changes roll out growth could slow further before it stabilises or rises again."